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METHODOLOGY

In updating the “Top 10 Ways Being Online Saves You Money” report, IIA looked at the top areas of consumer spending and the discounts that are available to Internet users. Based on the 2012 Consumer Expenditure Survey released by the U.S. Department of Labor, we used online resources and applications to find discounts on essentials like housing, apparel, gasoline and food. Mobile broadband and apps have changed the way that people shop online, providing access to discounts on everything from leisure activities to groceries. Some areas of this analysis, like housing, gasoline and newspaper expenditures, required data specific to certain cities. For the purposes of this report, we chose five of the top 12 U.S. cities by population (New York, Chicago, Los Angeles, Dallas and Jacksonville) also keeping geographic diversity in mind. In a departure from last year’s methodology, we factored in the average annual cost of a mobile data plan ($690) rather than the average annual cost of a home broadband connection. Overall, we found that, after figuring in the cost of a mobile data plan, the savings in this year’s analysis ($8,674) were slightly higher than those in last year’s analysis ($8,170) and the year prior ($7,695). We looked at comparable products across the board and used similar websites for comparison, along with a number of apps available for tablets and other mobile devices. The below methodology provides more detail as to the calculations used for each savings category.

ONE. HOUSING. POTENTIAL SAVINGS: $1,850/YR (13.52%)

Source: Search based study on apartments in New York, Chicago, Los Angeles, Dallas and Jacksonville
Methodology: Sampled 50 online postings in the above markets to determine average cost savings relative to local apartment rent. Considered the average annual expenditure on shelter ($16,887) minus the annual mortgage interest and charges for owned homes ($3,200) based on the Department of Labor annual study on consumer expenditures. Applied 13.52% savings factor to the remaining average expenditure for apartment living ($13,687).
Source examples: www.craigslist.org, Craigslist App, www.trulia.com, Trulia Rent App, www.apartments.com , Apts.com App

THREE. TRAVEL. POTENTIAL SAVINGS: $1,800/YR (20%)

Source: Amadeus Case Study amadeus.com/us/documents/aco/us/BearingPoint.pdf
Methodology: Applied 20% savings factor from Amadeus study to the average amount spent on travel ($8,998) based on the Department of Labor annual study on consumer expenditures.

FOUR. FOOD. POTENTIAL SAVINGS: $760/YR (19.38%)

Source: Search based study on basic basket of groceries based on top selling categories (Carbonated beverages, Milk, Fresh bread, Beer, Salty snacks, Natural cheese, Frozen dinners/entrees, Cold cereal, Wine, Cigarettes)
Methodology: Created a standard basket of monthly groceries to establish a baseline retail cost. Conducted a series of online searches against the baseline to identify cost savings exclusive to the Internet. Potential savings based on cost reductions at the aggregate basket level. Applied 19.38% savings factor to the average annual expenditure on food at home ($3,921) based on the Department of Labor annual study on consumer expenditures.
Source example: www.couponmom.com, www.peapod.com, www.coupons.com

FIVE. NON PRESCRIPTION DRUGS. $114/YR (31.94%)

Source: Search based study on common over the counter medicines (Pain Relievers, Antacids, Cold Remedies, Allergy Relief, Natural Remedies)
Methodology: Created a standard basket of the best-selling non-prescription drugs to establish a baseline retail cost. Conducted a series of online searches against the baseline to identify cost savings exclusive to the Internet. Potential savings based on cost reductions at the aggregate basket level. Applied 31.94% savings factor to the average annual expenditure on non-prescription drugs, which was derived as 10% of the average annual expenditure on healthcare ($3,556) from the Department of Labor annual study on consumer expenditures.
Source example: www.drugstore.com, www.amazon.com

SIX. GASOLINE. POTENTIAL SAVINGS: $142/YR (5.57%)

Source: Search based study on lowest gasoline prices in New York, Chicago, Los Angeles, Dallas and Jacksonville
Methodology: Researched average gas prices for each of the above cities, and found the lowest advertised prices in each, for a savings of 5.57% off of average gasoline expenditure ($2,549) based on the Department of Labor annual study on consumer expenditures.
Source example: www.gasbuddy.com, GasBuddy App

SEVEN. ENTERTAINMENT. POTENTIAL SAVINGS: $2,964/YR (56.11%)

Source: Search based study on restaurant dining, sporting/concert tickets and leisure activities in New York, Chicago, Los Angeles, Dallas and Jacksonville
Methodology: Applied savings factor of 56.11% on dining outside of the home ($2,605) and entertainment such as concerts, events and leisure activities to the entertainment budget ($2,678) based on the Department of Labor annual study on consumer expenditures.
Source example: Groupon App, Living Social App, www.bargainseatsonline.com

EIGHT. APPAREL. POTENTIAL SAVINGS: $1,100/YR (63.38%)

Source: Search based study on basic clothing combinations for men and women
Methodology: Created a set of standard baskets of apparel for a man (khakis/jeans and shirts) and a woman (skirts/jeans and tops) to establish a baseline retail cost in each of five price categories. Conducted a series of online searches against the baseline to identify cost savings exclusive to the Internet. Applied 63.38% savings factor to the average annual expenditure on apparel ($1,736) based on the Department of Labor annual study on consumer expenditures.
Site example: JackThreads App, Overstock.com – Mobile, Gilt App

NINE. NEWSPAPERS. POTENTIAL SAVINGS: $87/YR (37.37%)

Source: Search based study reviewing major newspapers in New York, Chicago, Los Angeles, Dallas and Jacksonville
Methodology: Calculated the standard annual rate for a daily delivery (including Sunday) subscription for the top three papers in each of the above cities. Potential savings factor based on average annual daily subscription rates vs. online subscription rates and access to the newspaper’s app (where available).
Source example: www.nytimes.com, www.chicagotribune.com, www.dallasnews.com

TEN. BILL PAY. POTENTIAL SAVINGS: $47/YR (100%)

Source: Cost analysis based on average consumer’s postage for six bills per month, plus one pay-by-phone charge.
Methodology: Created a standard multiple of monthly bills that are traditionally paid via postage (Rent/Mortgage, Gas, Electric, Water, Cable/Phone/Internet, Mobile). Applied average cost per US postal stamp ($0.44) for each monthly bill, plus the savings of one average pay-by-phone charge ($15).
Site examples: www.mycheckfree.com, www.chase.com, www.bankofamerica.com